English High Court Issues Anti-Suit Injunction In Respect Of Lebanese Arbitration: What Are 'Exceptional Circumstances'?

In the recent decision in Sana Hassib Sabbagh v. Khoury & Ors [2018] EWHC 1330 (Comm), the English High Court issued an anti-suit injunction to restrain parties from pursuing an arbitration seated in Lebanon. The decision confirms that - although "exceptional circumstances" are required - the Court has the jurisdiction to do so and is prepared to exercise it in practice. This Alert examines this decision, which may provide a benchmark for the kind of exceptional circumstances required for the Court to restrain a foreign arbitration by way of injunction.

The claims

The underlying case concerns a dispute between the Claimant and, principally, her brothers, regarding entitlement to the assets of their late father Mr Hassib Sabbagh, founder of the Consolidated Contractors Company ("CCC") group, the largest group of engineering and construction companies in the Middle East. In 2013, the Claimant commenced proceedings in the English courts against the chairman of the CCC group (the "anchor defendant" on the basis that he was domiciled in England), the Claimant's brothers, relevant entities of the CCC group, and other directors of the CCC group, as necessary and proper parties to the litigation.

There were two material claims, referred to as the "asset misappropriation claim" and the "share deprivation claim". The asset misappropriation claim alleged that the principal Defendants conspired shortly after Mr Sabbagh's stroke in 2002 to misappropriate assets belonging to him and ultimately to deprive the Claimant of her entitlement to the shares in the CCC group to which she would have been entitled as an heir to her father's estate. The share deprivation claim comprised allegations that, following Mr Sabbagh's death in 2010, the Defendants conspired to deprive the Claimant of her entitlement under Lebanese law to a third of her father's shares in the CCC group holding company ("CCG") by an unlawful transfer of all CCG shares to a separate company ("HH") under the Claimant's brothers' ownership and control.

Lebanese arbitration

Subsequent to the Claimant's commencement of English proceedings her brothers, together with CCG and HH, commenced an arbitration seated in Lebanon against the Claimant, purportedly on the basis of an arbitration agreement in CCG's Articles of Association, which covered two kinds of disputes "arising during the course of the existence of the company or during its liquidation": individual disputes of an aggrieved party against...